The
Company Presidency; Enron and the Bush family
have boosted each other up the ladder of success.
But have their ties created a Teapot Dome?From:
The Los Angeles Times; Los Angeles, Calif.; Feb
10, 2002; KEVIN PHILLIPS

Abstract:

In
retrospect, it's unclear whether the [George W.
Bush] dynasty built Enron or vice versa. In 1985,
when Enron was formed, the Bushes were an important
political family. George Bush, as vice president,
headed the Reagan administration's task force
on energy policy. But in terms of Texas oil money
and stature, the Bushes were third echelon. When
George W. ran for governor of Texas in 1994, Ann
Richards, the Democratic incumbent, joked that
of the oil companies he had started or been involved
with, none had made a profit. Enron's rise, with
the Bush family's help, in the 1990s rearranged
the energy power structure in Texas and the nation,
and put the Bush entourage in clover. The question
now is whether what went up together will come
down together.

From 1988 to 1992, Bush the elder collected hefty
political contributions from Enron. When president,
it was his ambassador in Buenos Aires who had
pushed for favorable tax treatment for Enron in
Argentina. Bush asked Enron chief Kenneth L. Lay
to co-chair a host committee for the July 1990
G-7 economic summit in Houston and appointed him
to his Export Council in late 1990. A year earlier,
Bush energy officials began work on the 1992 Energy
Policy Act. Its provisions obliged utility companies
to carry and transmit Enron- generated electricity,
which contributed to the company's subsequent
huge growth. In 1992, Lay was named co-chairman
of the Bush reelection campaign and chairman of
the host committee of the Republican National
Convention in Houston.

Enron boosters who landed government jobs are
Patrick H. Wood III, the former Texas Public Utilities
Commission chairman who now heads the Federal
Energy Regulatory Commission (FERC), and Nora
M. Brownell, a former pro-Enron public-utilities
commissioner in deregulated Pennsylvania, who
is also a FERC member. White House personnel chief
Clay Johnson, a former energy lawyer in Houston;
Army Secretary Thomas E. White, a former Enron
senior executive; Commerce Department general
counsel Ted Kassinger, a former Enron advisor
and trade lawyer with Vinson & Elkins; Montana
ex-Gov. Marc Racicot, the former Enron lobbyist
recently named Republican National Committee chairman
by Bush.

Full
Text:(Copyright, The Times Mirror Company;
Los Angeles Times 2002 Allrights reserved)

Enron's
spectacular collapse has put scores of politicians
on the defensive because of their pro-Enron voting
records and their war chests full of Enron dollars.
Even some Cabinet officials are squirming over
their past relationships with the energy company.
It's all an unsettling echo of Teapot Dome, the
government-oil-reserve- loan scandal of the Harding
presidency, which became a symbol of the financial
and political abuses of the 1920s.

In
1921, the U.S. Interior Department rigged the
leasing of California's Elk Hills and Wyoming's
Teapot Dome naval oil reserves after Interior
Secretary Albert B. Fall received "loans" from
oilmen Edward L. Doheny and Harry Sinclair. The
loans of cash and stock were in the $400,000 range,
with a "gift" of $100,000 from Doheny.

Both
Teapot and Enron involved energy policy, privatization
and corruption. And like Teapot Dome's "Ohio gang"
of ethically loose Harding cronies, oilmen and
administration officials--energy deregulation
during the first Bush administration, through
the Clinton years and George W.'s time as governor
of Texas on up till today has been warped and
feasted upon by a Texas-led "Enron gang." In both
scandals, some Democrats were involved, but the
power centers of misbehavior were Republican.

Yet,
there has been nothing quite like the rise and
fall of Enron in U.S. history, certainly no plausible
comparison since the late- 19th-century heyday
of railroads and robber barons. The sums in Enron's
collapse certainly overshadow those in Teapot,
much as a space shuttle does a Model T Ford. More
important, not in memory has a single major company
grown so big in tandem with a presidential dynasty
and a corrupted political system. Indeed, the
Bush family has been a prominent and well-rewarded
rung in Enron's climb to national political influence.

In
retrospect, it's unclear whether the Bush dynasty
built Enron or vice versa. In 1985, when Enron
was formed, the Bushes were an important political
family. George Bush, as vice president, headed
the Reagan administration's task force on energy
policy. But in terms of Texas oil money and stature,
the Bushes were third echelon. When George W.
ran for governor of Texas in 1994, Ann Richards,
the Democratic incumbent, joked that of the oil
companies he had started or been involved with,
none had made a profit. Enron's rise, with the
Bush family's help, in the 1990s rearranged the
energy power structure in Texas and the nation,
and put the Bush entourage in clover. The question
now is whether what went up together will come
down together.

As early as 1988, when his father was president-elect,
George W. Bush lobbied the Argentine government
on behalf of an Enron pipeline proposal. Bush,
through his staff, has denied making a telephone
call on Enron's behalf, but Rodolfo Terragno,
the Argentine minister of public works and services
at the time, insists he did. When newly elected
President Carlos Menem made a sweetheart deal
with Enron, freeing the corporation of certain
Argentine tariffs and taxes when doing business
in the country, lawmakers demanded an investigation,
and a special prosecutor undertook the task. But
since his Justice Department was already "investigating,"
Menem fired the prosecutor.

From
1988 to 1992, Bush the elder collected hefty political
contributions from Enron. When president, it was
his ambassador in Buenos Aires who had pushed
for favorable tax treatment for Enron in Argentina.
Bush asked Enron chief Kenneth L. Lay to co-chair
a host committee for the July 1990 G-7 economic
summit in Houston and appointed him to his Export
Council in late 1990. A year earlier, Bush energy
officials began work on the 1992 Energy Policy
Act. Its provisions obliged utility companies
to carry and transmit Enron- generated electricity,
which contributed to the company's subsequent
huge growth. In 1992, Lay was named co-chairman
of the Bush reelection campaign and chairman of
the host committee of the Republican National
Convention in Houston.

In December 1992, Bush's Commodity Futures Trading
Commission, chaired by Wendy L. Gramm, wife of
Texas GOP Sen. Phil Gramm, created a legal exemption
that allowed Enron to begin trading energy derivatives--another
growth enhancer for the company. When Bush left
the White House in 1993, Enron made Wendy Gramm
a company director and signed a joint consulting
and investing agreement with James A. Baker III,
Bush's secretary of State, and Robert A. Mosbacher,
his Commerce secretary. The two were to do Enron's
global deal-making for natural-gas projects.

How much the Bush family and its close political
entourage actually collected from Enron and its
executives since the company was organized is
a matter of definition--reportable political contributions,
soft money for the Republican Party, finders'
fees, joint investments, inauguration funding,
presidential-library donations, speech money,
capital gains, consulting fees, directors' fees
or what? If you combine what the multiple Bush
generations received with what loyalists Vice
President Dick Cheney, Baker, Mosbacher, political
advisor Karl Rove, economic advisor Lawrence B.
Lindsey and U.S. Trade Representative Robert Zoellick
got, you certainly have $6 million to $8 million,
and depending on the success of the Baker-Mosbacher-Enron
joint investments, perhaps $20 million to $30
million.

On top of which, 29 top Enron executives and board
members (and its accounting firm, Andersen), the
majority of whom were significant Bush contributors
in 2000, are being sued by Enron shareholders
to recover $1.1 billion made by the 29 in alleged
insider trading of Enron stock.

But
let us return to Texas in 1995. George W. Bush
has been elected and inaugurated as governor.
Enron chairman Lay and Joe B. Allen of Vinson
& Elkins, Enron's Houston law firm, are his top
fund- raisers. Lay also chairs the governor's
Business Council, and press reports have Lay writing
regularly to Bush, seeking favors, recommending
appointments and asking the governor to receive
visiting dignitaries from places where Enron hoped
to do business.

Bush
began pushing Enron-backed deregulation in his
first year as governor. In 1997, he urged then-Pennsylvania
GOP Gov. Tom Ridge to support an Enron-backed
energy-deregulation plan for the state. Then in
1999, Bush succeeded in getting a kindred deregulatory
blueprint enacted in Texas.

By 2000, Bush was running for president and, once
again, Enron's checkbook was open. Lay and Enron
would be Bush's biggest corporate contributor,
with Vinson & Elkins not too far behind. This
was the year when Lay also sent a memo to company
employees urging them to contribute personally
to Bush through the Enron Political Action Committee.

Enron's
roster of advisors and lobbyists became a pay-station
for senior Bush campaign strategists and advisors:
Lindsey, former Christian Coalition honcho Ralph
Reed and Zoellick.

When the 2000 presidential election ended up in
the Florida courts, Enron helped fund the Bush
campaign's expenses, a fitting gesture because
the effort's captain was Baker, the old Enron
deal- maker, with Enron advisor Zoellick--known
also as Baker's "second brain"--back as first
lieutenant. Then when the U.S. Supreme Court decided
the election, Lay and his fellow power brokers
popped the figurative champagne cork with a $300,000
contribution to the Bush- Cheney inaugural gala.

In
Washington, the Enron gang--let's call them the
"E team"--also included Sen. Gramm and Texas Reps.
Dick Armey, the House majority leader, and Tom
DeLay, House majority whip. All received large
Enron contributions--Gramm collected $100,000
over 12 years, the second- largest draw in Congress--and
their voting records were supportive of Enron
causes. Gramm's decision last September to retire
from the Senate may have stemmed from his worry
that he might be politically vulnerable for being
a leading supporter of 2000 legislation that facilitated
Enron's entry into commodity derivatives markets
and exempted the company from key financial reporting
requirements, while his wife was an Enron director
with sizable company holdings.

Enron boosters who landed government jobs are
Patrick H. Wood III, the former Texas Public Utilities
Commission chairman who now heads the Federal
Energy Regulatory Commission (FERC), and Nora
M. Brownell, a former pro-Enron public-utilities
commissioner in deregulated Pennsylvania, who
is also a FERC member. White House personnel chief
Clay Johnson, a former energy lawyer in Houston;
Army Secretary Thomas E. White, a former Enron
senior executive; Commerce Department general
counsel Ted Kassinger, a former Enron advisor
and trade lawyer with Vinson & Elkins; Montana
ex-Gov. Marc Racicot, the former Enron lobbyist
recently named Republican National Committee chairman
by Bush.

The drafting of a Bush federal energy policy fell
into the vice president's lap. A previous Enron
shareholder and a friend of Lay's, Cheney had
run the Halliburton Co. One of its divisions built
Houston's Enron Field, the new home of the Houston
Astros baseball team. Cheney's chief of staff,
Lewis Libby, was an Enron stockholder. Cheney,
who refuses to say what he and Lay discussed in
their private meetings, and the General Accounting
Office, an investigating arm of Congress, is suing
the vice president to obtain that information.

Enron's
largess has even compromised law enforcement.
U.S. Atty. Gen. John Ashcroft has recused himself
from Enron-related matters because of large Enron
political contributions he received while a Missouri
senator. Deputy Atty. Gen. Lawrence Thompson,
from the Enron- representing Atlanta law firm
of King & Spalding, is also under pressure to
follow his lead. The office of the U.S. attorney
for the Southern District of Texas, which includes
Houston, has had to recuse itself en masse.

In
the months and years ahead, as the congressional
and criminal investigations fill in the details
of the Enron story, the collapse of Enron may,
like Teapot Dome, come to symbolize an era of
financial and political excess. If so, there is
even some chance that it could do for the memory
of Bush what those California and Wyoming oil
leases did for the memory of Harding.

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